Collecting Your Receivables Presentation

10 Market Leading Tips to Collecting Your Receivables Get Paid and Get Paid First!

Welcome!
Eric Renaud is Sr. Vice President of Portfolio Risk Management for Direct Capital Corp., with 25 years of credit, collection and risk management experience in the finance services industry.
Mr. Renaud has also served as an adjunct professor teaching collection receivable courses to small business owners, and he is a member of the National Association of Credit Managers (NACM).

The Problem
Getting paid is
taking longer
DSO increasing
Losses increasing
Customers are not making
your payment a priority
Broken promises
Check is in the mail

The Solution
Employ new Strategies to Collecting
Arm yourself with proven strategies and
approaches
Goal is to get paid and get paid first
Utilize various leverage points to effect
payment
Put you in a position to mitigate losses

Tip # 1 – Know your Customer
To Start:
Credit Release Authorization
Bank and trade references
Google, etc.
How does your customer generate
income?
Going Forward:
Business and personal credit information
Contact information
Behavior changes

Tip #2 – Get it in Writing
Establish Clear Documented
Payment Terms
Use a written agreement
State how much is due and when
State actions taken if payment is not
made on time

Tip # 3 – Establish Consistent Protocol
Timely Invoices
Avoid delays in payment processing
Administrative failure vs. cash-flow issue
Consistent collection call activity
Early intervention is key
The “Squeaky Wheel” approach
Follow through on your word
Don’t give away your leverage
Avoid top of the ledger pressure

Tip # 4 – Offer Various Payment Methods
Don’t wait for checks to arrive by mail
ACH/EFT
Check by Phone
Credit Cards
Western Union
Keep payment info on file (with security)

Tip # 5 – Recognize Early Warning Signs
Unable to reach the customer
Administrative excuses for
delay
Broken promises for
payment
Adverse change in habits

Tip # 6 – Stop the Heisman
Speak to the owner/real decision maker
Get past the AP Department or Reception Desk
Call the owner at home or via initial contact info
Make a visit to your customer’s
business
Face to face meetings are much
more effective
Can be arranged or unannounced

Tip # 7 - Help Them to Help You
Find out why your customer can’t pay
Determine if a short or long term issue
Offer to assist your customer
with issues
Make suggestions to
increase cash flow

Tip #8 - Become the Priority
You must pay now - no more excuses
Use leverage points to be a priority
Obtain additional security

Tip # 9 - Utilize Specialists
Send out a Legal
Default Letter
Third-party collection assistance
Removes you from the collection situation
Have the capacity, experience and time to handle

Tip #10 – Take Legal Action
Is the Customer ‘collectable’?
Identify assets that can be attached
Yes:
Pursue your customer and
owner
No:
Place with a collection agency
Report the loss on Credit Reports

Summary
KNOW YOUR CUSTOMER’S CREDIT PROFILE
GET IT IN WRITING
ESTABLISH CONSISTENT PROTOCOL
OFFER VARIOUS PAYMENT METHODS
RECOGNIZE EARLY WARNING SIGNS
STOP THE HEISMAN
HELP THEM TO HELP YOU
BECOME THE PRIORITY
UTILIZE SPECIALISTS
TAKE LEGAL ACTION

About D IRECT C APITAL ®
Founded in 1993 in Portsmouth, NH, Direct Capital’s mission is to provide simple, fast and cost-effective solutions to help businesses acquire the financing they need to succeed.
About D IRECT C APITAL ® Founded in 1993 in Portsmouth, NH, Direct Capital’s mission is to provide simple, fast and cost-effective solutions to help businesses acquire the financing they need to succeed. blog.directcapital.com twitter.com/directcapital blog.directcapital.com twitter.com/directcapital

Collecting Your Receivables Presentation

by Direct Capital on Sep 15, 2009

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Collecting Your Receivables Presentation — Webinar Transcript